Clicks-to-Bricks: Online Retailers Move into Prime Real Estate

While major brick and mortar chains like Walmart and Target are doing everything they can to boost their online sales, and Amazon.com is jumping into the world of big box retail by buying Whole Foods, smaller online retailers are stepping into a retail void that has opened up in some of the best territory on earth, Manhattan.

Esther Fung reports in The Wall Street Journal that online retailers are being courted by the likes of the Feil Organization, a commercial real estate firm, and others like it that see e-commerce companies looking for ways to expand their on-the-ground operations. Fung writes of the so-called “clicks-to-bricks” trend:

The retailers, which signed leases for 1,712 square feet and 968 square feet, respectively, will be joining current tenants Bonobos and Untuckit, also men’s clothing retailers.

Bonobos was the first tenant Feil signed after a renovation of the building was completed in 2016, and the lease with Untuckit followed soon after. Walmart Inc. acquired Bonobos in 2017.

“We knew the clicks-to-bricks concept was gaining traction and realized, hey, this is a true path we could go down,” said Brian Feil, vice president of leasing for Feil.

Changes in consumer behavior and the growth of e-commerce have upended the retail industry, compelling traditional retailers to reinvent themselves, close underperforming stores and boost their online sales channels. Landlords, meanwhile, are renovating and reimagining their premises to keep them updated.

Lesser-known online sellers, which have been nimbler to consumer trends, are now looking to open physical stores to complement their online presence. While such prospective tenants have slimmer track records, analysts said landlords have to be accustomed to make changes, even if it means taking on more risk.

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